Rising insurance costs strain truck financing sector

Escalating insurance costs are exacerbating high interest rates and rising new truck prices, contributing to tight lending standards and creating insurance financing opportunities.  

Truck insurance premiums have soared 43.7% over the past five years, according to a July 1 report by the American Transportation Research Institute. In addition, they rose 3% year over year in 2024 to a record 10.2 cents per mile, following a 12.5% increase YoY in 2023. Premiums were up 5.8% YoY in the first quarter. 

Climbing insurance costs and high interest rates are making it more difficult for operators to make their monthly loan payments as they get “squeezed from a number of standpoints,” Kirk Mann, executive vice president and head of transportation at Mitsubishi HC Capital America, told Equipment Finance News. 

High insurance costs are adding to a tight truck financing sector that’s also grappling with rising new vehicle prices and tariff uncertainty. Dealers reported a 13.9% YoY decline in new truck orders in the first quarter, according to heavy-equipment research firm IronAdvisor Insights. 

Litigation, last-mile trucking drive surge 

The Federal Motor Carrier Safety Administration recorded between 143,000 and 156,000 accidents per year from 2020 to 2024, making litigation inevitable.  

Several lawsuits in recent years have culminated in “nuclear verdicts,” a major contributing factor to increased insurance costs, Eryn Brasovan, partner at national law firm Womble Bond Dickinson, whose specialties include insurance, told EFN. A nuclear verdict is a jury award exceeding $10 million.  

Rising premiums are “less tied to any regulation, and more a result of social inflation and what the industry feels are nuclear verdicts,” she said, adding that the large awards are leading to larger pretrial settlements to avoid a jury trial. 

Cases that have resulted in nuclear verdicts include: 

• Perkins v. Wabash National, which required truck manufacturer Wabash to pay $450 million in punitive damages and $6 million in compensatory damages to the families of two people killed in an underride crash. A St. Louis jury in September 2024 found Wabash liable for failing to adopt stronger safety measures regarding its rear impact guards; and 
• Leila Miyamoto v. Services Group of America (SGA), with a Los Angeles jury awarding $21 million to a woman after a truck operated by food distribution and logistics firm SGA slammed into the back of her vehicle and caused severe injuries.  

Another factor driving up premiums is the high demand for last-mile deliveries, which are also increasing demand for drivers, Brasovan said. 

“It’s that last leg of the deliveries from Amazon and UPS and such,” she said. “It’s really driving a lot of the hiring needs, as well as just more exposure to accidents.”  

Insurance financing eases cost burdens 

Insurance brokers can help ease truckers’ cost burdens by arranging insurance premium financing, Brasovan said. That’s especially helpful given that many insurance companies “aren’t interested so much in offering installments to transportation companies on policies because of what’s viewed as credit risk,” she said. 

“So, they’re looking to insurance premium finance to be able to spread out those payments and make them more affordable than having to come up with a lump sum,” she said. 

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